Sebastian Coe, chairman of the London 2012 Olympic organising committee, yesterday issued a stark warning that his old sport must make big improvements if it is to have an impact at the Games in six years' time.

"This year I'm prepared to accept this is a period of consolidation and perhaps changing the culture of the team a bit," the 1980 and 1984 Olympic 1500 metres champion said. "But next year, 2007, five years out [from the Olympics], you want to start seeing more athletes in finals and that's where it has got to start."

Britain is heading for its worst performance in the 60-year history of the European Championships, which open in Gothenburg next month, as it goes through a painful transition under the new performance director David Collins.

"Actually, if you look at what we have been doing for the last few years it has been a steady downward trend," said Coe. "I don't think anyone can argue with that. We've had some golden moments - we've had Kelly [Holmes], of course, and the 4x100m [at the 2004 Olympics] but there are some issues we need to tackle.

"We are not getting enough men into finals. We've got to compete more consistently as a team. No team should ever leave these shores without knowing about the history of the sport - I'm not saying you go in and lord it around, but I think people have to understand there is a high level of expectation in this country still.

"We as a sport are in trouble if we go abroad and there is no expectation on us at all. I never want to see UK athletics get to the point where Finnish athletics did [last year] when the stadium erupted [at the world championships] and almost had a public holiday because they almost nicked a bronze medal in the long jump."

Collins has said he believes Britain is capable of winning 10 medals in Gothenburg but that would be a major disappointment for a country that claimed nine golds at the European Championships in 1990 and has regularly finished in the top three of the medal table.

"We've got to recognise that it is very dangerous if we set targets that are under-ambitious," said Coe. "It's about getting people to believe this is a country that can produce athletes. The European Championships this year are an important outing but the sport in Europe has dipped, so it's not quite the benchmark it once was."

Coe has never hidden the fact that he would most like to see Britain produce a world-class middle-distance runner for 2012, following in the steps of himself, Steve Ovett and Steve Cram.

"I'm slightly encouraged by at least seeing a glimmer of hope in the middle-distance races with people running 1min 45sec for 800m," he said. "But we shouldn't get too excited. When I was competing in the county championships in Yorkshire 20 years ago I would need to run that to fend off Peter Elliott, who was 18 at the time.

"But bearing in mind where we have come from, it's hugely encouraging. The issue is that the assessment is going to be more acute because before we didn't have such a target to aim for as 2012. It's understandable there is going to be more pressure to ensure there is a momentum leading up to London.

"We've got to produce quality athletes. We can't have an Olympic Games without a shop window that is worthy of the name. We don't have any alternative but to find quality competitors."